Austria will introduce a number of important tax changes from 2027. Some familiar tax benefits will disappear, investment incentives will become more restrictive, and both employees and businesses will need to adjust their tax planning.
These are no longer merely proposed measures. Key changes have been enacted through the Budget Accompanying Act 2027–2028 and published as Federal Law Gazette I No. 62/2026.
Working remotely: tax-free allowance abolished
Until the end of 2026, employers can pay employees up to EUR 3 per remote-working day, for a maximum of 100 days per year, free of Austrian income tax and social security contributions.
This preferential treatment will be abolished from 1 January 2027.
The workplace allowance previously available to certain self-employed persons working from home will also be abolished.
However, qualifying expenditure on ergonomic office furniture will remain deductible up to EUR 300 per calendar year.
Investment-related profit allowance becomes more restrictive
Another important change concerns Austria’s investment-related profit allowance for entrepreneurs.
For financial years 2027 to 2029, qualifying assets will temporarily be restricted to real investments. Securities that could previously be used to obtain the investment-related profit allowance will generally no longer qualify during this period.
Entrepreneurs who traditionally make investments towards the end of the year to optimise their taxable profit should therefore reconsider their investment strategy before 2027.
Corporate income tax: progressive taxation from 2028
The general Austrian corporate income tax rate will remain 23% in 2027.
The new progressive system will apply to financial years beginning after 31 December 2027.
From 2028:
taxable income up to EUR 1 million will remain subject to 23% corporate income tax;
the portion exceeding EUR 1 million will be taxed at 24%.
Importantly, exceeding the EUR 1 million threshold does not result in the company’s entire taxable income being taxed at 24%. Only the excess is subject to the higher rate.
Preparing for the changes
Employers should review their remote-working arrangements and payroll processes. Self-employed individuals should reconsider their investment planning and the use of the investment-related profit allowance. Companies expecting significant profits should incorporate the new corporate income tax structure into their planning for 2028.
steuerexperten.at can assist you in assessing how the new rules affect your individual or business tax situation.
